Myths and Realities

Sep 1, 2005

Hedge fund Elliott Associates answers critics of its role in Argentina's debt restructuring and calls for changes in the IMF's approach to financial crises.

Activist investors are routinely derided as "vultures" and
"rogue creditors." A June editorial in LatinFinance
entitled "Of Judges and Vultures" was no exception. It asserted
that our firm, Elliott Associates, bought defaulted Argentine
debt to force Argentina to pay in full, that we  and
holders of over $20 billion of bonds not tendered into
Argentina's recent debt exchange  now hold "worthless"
paper, that the US Second Circuit ruling on attachment
"vindicate[d] the exchange mechanism," and that
"vultures...took a risk and lost" and "should pay the price."
In addition, the editorial asserted that Elliott owned
defaulted Nicaraguan debt  which is not true  and
was involved in litigation in that country, which is also not
true.

First, Elliott bought the bulk of its Argentine debt well
before the country's December 2001 default. Rather than
intending to "force" Argentina to pay in full, we believed
that...